Terra, a Blockchain outfit that uses Bitcoin (BTC), to back its new US Dollar stablecoin has purchased over 5,000 BTC.
According to Wallet data, Terra added 5,040 BTC on April 6th to its balance, bringing it up to 35,768 BTC.
Terra purchases the dip… again
After a long lull in purchasing activity due to the Blockchain protocol, the move is made.
Do Kwon, the co-founder of the project, told Twitter followers this week that it was only getting started. However, a mainstream media interview revealed plans for “perpetual” BTC purchases.
Kwon explained that Terra wants to create a “decentralized Forex reserve” using Bitcoin as collateral. TerraUSD (UST) will be the stablecoin and have BTC as well as Terra’s native LUNA token backing it.
Initially, the plan was to have $3 billion of Bitcoin reserves. This number will increase to $10 billion, Kwon stated last month. Additional BTC purchases will be made depending on how much UST has been minted.
Today, I: – Watered my flowers – Wrote emails – Bought $230M in $BTC and vacuumed the house. Now it’s time to walk the dog
— Do Kwon (@stablekwon), April 6, 2022
Terra’s non-profit organization, the Luna Foundation Guard (LFG) is the entity that attaches to the BTC wallet and is involved in collateralizing UST. It is still the 29th largest BTC wallet.
LFG Bitcoin wallet (screenshot). Source: BitInfoCharts
Kwon stated to the media that large buy-ins are not a corporate treasury move. However, the LFG wallet balance is on its way to competing against the MicroStrategy largest such treasury. This week, the latter added to its BTC reserves by buying approximately 4,000 coins, for a total value of 129,218 BTC.
Terra could purchase an additional 184,800 BTC if it completed its remaining $10 billion allocation at the current spot price of BTC/USD $45,270.
Kwon is expected to be the world’s largest Bitcoin whale.
Spot price ignores tired stories
The Bitcoin price has been unable to react to large-scale commitments from Terra and MicroStrategy.
Related: Bitcoin retail FOMO has risen most significantly since 2017, but the BTC price could still be ‘doomed. Analyst
BTC/USD fell overnight after failing to break the 200-day moving mean of $48,000. This was according to data from TradingView and Cointelegraph Markets Pro.
This could lead to the return of the trading range it was in from 2022 through last week’s breakout.
However, Kwon’s reactions remained positive.
“Luna StableKwon just added approximately 4000 BTC to the stack. “This will eventually have an effect of a halves,” popular Twitter account @CivEkonom stated.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingViewcom. You should do your research before making any investment or trading decision.